-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, MPtSVDvcrOZb9ceXeQB6jy+BQ+8rejchevWQfZALq5OooxyJQ62joFBGZRrhzKCs azS4MfeqxsfW8X3cBiEk0w== 0000950115-99-000805.txt : 19990624 0000950115-99-000805.hdr.sgml : 19990624 ACCESSION NUMBER: 0000950115-99-000805 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19981231 FILED AS OF DATE: 19990525 FILER: COMPANY DATA: COMPANY CONFORMED NAME: WARBURG PINCUS WORLDPERKS TAX FREE MONEY FUND INC CENTRAL INDEX KEY: 0001066776 STANDARD INDUSTRIAL CLASSIFICATION: [] STATE OF INCORPORATION: MD FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: N-30D SEC ACT: SEC FILE NUMBER: 811-08901 FILM NUMBER: 99634264 BUSINESS ADDRESS: STREET 1: 466 LEXINGTON AVENUE CITY: NEW YORK STATE: NY ZIP: 10017-3167 BUSINESS PHONE: 2128789548 MAIL ADDRESS: STREET 1: 466 LEXINGTON AVENUE CITY: NEW YORK STATE: NY ZIP: 10017-3167 FORMER COMPANY: FORMER CONFORMED NAME: WARBURG PINCUS TAX FREE MONEY MARKET FUND INC DATE OF NAME CHANGE: 19980723 N-30D 1 ANNUAL REPORT [LOGO] ANNUAL REPORT December 31, 1998 WARBURG PINCUS WORLDPERKS MONEY MARKET FUND O WARBURG PINCUS WORLDPERKS TAX FREE MONEY MARKET FUND [LOGO] More complete information about the funds, including charges and expenses, is provided in the Prospectus, which must precede or accompany this document and which should be read carefully before investing. You may obtain additional copies by calling 800-WARBURG (800-927-2874) or by writing to Warburg Pincus WorldPerks Funds, P.O. Box 9030, Boston, MA 02205-9030. [LOGO] From time to time, the funds' investment adviser and co-administrators may waive some fees and/or reimburse some expenses, without which performance would be lower. Waivers and/or reimbursements are subject to change. Performance data represent past performance and are not a guarantee of future performance. The funds' yields will fluctuate. Each fund seeks to maintain a constant net asset value of $1.00 per share; there can be no assurance that it can do so on a continuing basis. An investment in each fund is neither insured nor guaranteed by the U.S. government. WorldPerks is a registered trademark of Northwest Airlines, Inc. Northwest Airlines may change the WorldPerks program rules, program partners, regulations, benefits, conditions of participation or mileage levels, in whole or in part, at any time, with or without notice, even though changes may affect the values of mileage or FlyWrite(sm) certificates already accumulated. The views of the funds' management are as of the date of the letters and portfolio holdings described in this document are as of December 31, 1998; these views and portfolio holdings may have changed subsequent to these dates. Nothing in this document is a recommendation to purchase or sell securities. WARBURG PINCUS WORLDPERKS MONEY MARKET FUND ANNUAL INVESTMENT ADVISER'S REPORT -- DECEMBER 31, 1998 - -------------------------------------------------------------------------------- February 5, 1999 Dear Shareholder: The objective of Warburg Pincus WorldPerks Money Market Fund is high current income consistent with preservation of capital and liquidity. As a money-market fund, the fund immediately adopted a very conservative posture with respect to the creditworthiness of the investments held in the portfolio, investing in high-quality U.S. government securities and commercial paper. We believe this stance will serve the fund well, especially given the increasing complexity of markets in the U.S. and abroad. As of December 31, the fund's net assets were $12.9 million. Its annualized seven-day yield was 4.41% (without waivers and/or reimbursements, the fund's annualized seven-day yield would have been 3.38%), and its seven-day average weighted maturity was 19 days. Going forward, the fund will continue to emphasize high-quality securities in an effort to provide competitive returns without compromising safety and stability of principal. We are committed to providing both a rewarding investment experience to our shareholders and an attractive, convenient means of accumulating WorldPerks* Bonus Miles, which can be used for free and discounted award travel on Northwest Airlines, Continental Airlines, KLM Royal Dutch Airlines and other WorldPerks partner airlines. We appreciate your continued support and investment in the fund. Eugene L. Podsiadlo BlackRock Institutional Management Corporation President Sub-Investment Adviser Warburg Pincus WorldPerks Funds *WorldPerks is a registered trademark of Northwest Airlines, Inc. 1 WARBURG PINCUS WORLDPERKS TAX FREE MONEY MARKET FUND ANNUAL INVESTMENT ADVISER'S REPORT -- DECEMBER 31, 1998 - -------------------------------------------------------------------------------- February 5, 1999 Dear Shareholder: The objective of Warburg Pincus WorldPerks Tax Free Money Market Fund is high current income exempt from federal personal income taxes consistent with preservation of capital and liquidity. Most of the fund's investments through the reporting period were in municipal variable-rate demand notes, which on average had yields that exceeded the yields on other short-term instruments. The emphasis on these securities proved particularly advantageous at year end, as the yields on these notes adjusted upward by 50 to 100 basis points. The fund's net assets on December 31 were $10.6 million. Its average seven- day yield was 3.13% (without waivers and/or reimbursements, the fund's annualized seven-day yield would have been 1.95%), and its seven-day average weighted maturity was 4 days. Going forward, we will continue to emphasize high-quality municipal securities in an effort to provide competitive after-tax returns without compromising stability of principal. We are committed to providing both a rewarding investment experience to our shareholders and an attractive, convenient means of accumulating WorldPerks* Bonus Miles, which can be used for free and discounted award travel on Northwest Airlines, Continental Airlines, KLM Royal Dutch Airlines and other WorldPerks partner airlines. We appreciate your continued support and investment in the fund. Eugene L. Podsiadlo BlackRock Institutional Management Corporation President Sub-Investment Adviser Warburg Pincus WorldPerks Funds *WorldPerks is a registered trademark of Northwest Airlines, Inc. The fund's income may be subject to state and city taxes and, for certain investors, the federal alternative minimum tax. 2 WARBURG PINCUS WORLDPERKS MONEY MARKET FUND STATEMENT OF NET ASSETS December 31, 1998 - --------------------------------------------------------------------------------
RATINGS= PAR (MOODY'S/S&P) MATURITY RATE% VALUE --- ------------- -------- ----- ----- COMMERCIAL PAPER (55.3%) Asset Backed Securities (6.2%) $ 400,000 Citibank Credit Card Master Trust (NR, P-1) 01/05/99 5.150 $ 399,771 400,000 Beta Finance Inc. (NR, P-1) 01/22/99 5.140 398,801 ----------- 798,572 ----------- Beverages (2.2%) 290,000 Coca-Cola Co. (A-3, P-1) 01/11/99 5.160 289,584 ----------- Business Credit Institutions (Finance Leasing Company) (3.8%) 500,000 Enterprise Funding Corp. (NR, P-1) 01/27/99 5.220 498,115 ----------- Electric and Other Services Combined (2.6%) 340,000 Wisconsin Electric Power Co. (A-3, P-1) 01/14/99 5.250 339,355 ----------- Finance Lessors (3.9%) 500,000 IBM Credit Corp. (NR, P-1) 01/15/99 5.050 499,018 ----------- Fire, Marine & Casualty Insurance (2.6%) 330,000 AIG Funding Inc. (A-3, P-1) 01/07/99 5.150 329,717 ----------- Life Insurance (5.7%) 400,000 Hancock Capital (NR, P-1) 01/11/99 5.130 399,430 340,000 MetLife Funding Inc. (NR, P-1) 01/15/99 5.250 339,306 ----------- 738,736 ----------- Amusement & Recreation (2.5%) 330,000 Walt Disney Co. (A-3, P-1) 02/09/99 5.050 328,519 ----------- Personal Credit Institutions (6.2%) 400,000 Ford Motor Credit Corp. (NR, P-1) 01/22/99 5.130 398,803 400,000 General Motors Acceptance Corp. (NR, P-1) 01/26/99 5.140 398,572 ----------- 797,375 ----------- Petroleum Refining (2.6%) 330,000 BP America, Inc. (A-3, P-1) 01/06/99 5.150 329,764 ----------- Pharmaceutical Preparations (2.1%) 275,000 Johnson & Johnson (NR, P-1) 04/20/99 4.750 271,045 ----------- Primary Production of Aluminum (2.2%) 290,000 Aluminum Company of America (A-3, P-1) 01/11/99 5.220 289,580 ----------- Retail Merchandising (3.1%) 400,000 Block Financial (NR, P-1) 01/08/99 5.150 399,599 ----------- Short-Term Business Credit Institutions (7.0%) 500,000 Caterpillar Financial Services Corp. (A-3, P-1) 01/08/99 5.050 499,509 400,000 Penney (JC) Funding Corp. (NR, P-1) 01/14/99 5.150 399,256 ----------- 898,765 ----------- Telephone Communications (2.6%) 340,000 Ameritech Corp. (A-3, P-1) 01/20/99 5.010 339,101 ----------- TOTAL COMMERCIAL PAPER (Cost $7,146,845) 7,146,845 -----------
See Accompanying Notes to Financial Statements. 3 WARBURG PINCUS WORLDPERKS MONEY MARKET FUND STATEMENT OF NET ASSETS (CONT'D) December 31, 1998 - --------------------------------------------------------------------------------
RATINGS= PAR (MOODY'S/S&P) MATURITY RATE% VALUE --- ------------- -------- ----- ----- AGENCY OBLIGATIONS (17.2%) $2,220,000 Federal National Mortgage Association (Cost $2,218,120) (Aaa, AAA) 01/07/99 5.080 $ 2,218,120 ----------- MEDIUM TERM NOTES (4.6%) Personal Credit Institutions (1.5%) 200,000 Associates Corp. of North America (A-3, NR) 03/15/99 6.000 200,315 ----------- Security Brokers & Dealers (3.1%) 400,000 Merrill Lynch & Co. (A-1+, P-1) 03/30/99 6.375 401,084 ----------- TOTAL MEDIUM TERM NOTES (Cost $601,399) 601,399 ----------- SHORT-TERM INVESTMENTS (22.4%) 2,900,000 Repurchase Agreement with Morgan Stanley & Co. Inc. dated 12/31/98 at 5.470% to be repurchased at $2,901,763 on 01/04/99. (Collaterized by $2,973,884, U.S. Treasury Bill at 5.470%, due 02/04/99. Market value of collateral is $2,990,000.) (Cost $2,900,000) 01/04/99 5.470 2,900,000 ----------- TOTAL INVESTMENTS AT VALUE (99.5%) (Cost $12,866,364*) 12,866,364 OTHER ASSETS IN EXCESS OF LIABILITIES (0.5%) 59,142 ----------- NET ASSETS (100%) (applicable to 12,925,394 shares) $12,925,506 =========== NET ASSETS VALUE, offering and redemption price per share ($12,925,506 divided by 12,925,394) $ 1.00 ===========
INVESTMENT ABBREVIATIONS NR = Not Rated - -------------------------------------------------------------------------------- = Credit ratings given by Moody's Investors Service, Inc. and Standard & Poor's Ratings Services are unaudited. * Also cost for federal income tax purposes. See Accompanying Notes to Financial Statements. 4 WARBURG PINCUS WORLDPERKS MONEY MARKET FUND MATURITY SCHEDULE OF PORTFOLIO December 31, 1998 (Unaudited) - -------------------------------------------------------------------------------- MATURITY SCHEDULE (DAYS) PAR PERCENTAGE OF PORTFOLIO ----------------- ----------- ------------------------ (CUMULATIVE) 1-7 $ 6,180,000 48.0% 48.0% 8-14 2,620,000 20.3 68.3 15-30 2,880,000 22.3 90.6 31-60 330,000 2.6 93.2 61-90 600,000 4.7 97.9 91-120 275,000 2.1 100.0 121-150 0 0.0 100.0 Over 150 0 0.0 100.0 ----------- ----- $12,885,000 100.0% =========== ===== Average Weighted Maturity -- 16.60 days See Accompanying Notes to Financial Statements. 5 WARBURG PINCUS WORLDPERKS TAX FREE MONEY MARKET FUND STATEMENT OF NET ASSETS December 31, 1998 - --------------------------------------------------------------------------------
RATINGS= PAR (MOODY'S/S&P) MATURITY RATE% VALUE --- ------------- -------- ----- ----- MUNICIPAL BONDS (99.2%) CALIFORNIA (1.9%) $ 200,000 California Finance Authority Pollution Control Revenue Bond (Pacific Gas and Electric Company) (Bank of America LOC) VRDN+ (Cost $200,000) (A-1+, NR) 01/01/99 5.000 $ 200,000 ------------ COLORADO (4.7%) 500,000 Colorado Student Obligation Bond Authority Student Loan Revenue Bond Series 1997D (A-1+, (SLMA LOC) (Cost $500,000) VMIG-1) 01/07/99 3.950 500,000 ------------ GEORGIA (4.7%) 500,000 Putnam County, Development Authority of Pollution Control Revenue Bonds (Georgia Power Co. Plant Bowen Project) (Cost $500,000) (NR, VMIG-1) 01/01/99 5.050 500,000 ------------ INDIANA (4.7%) 500,000 Indiana Municipal Power Agency Power Supply System Refunding Revenue Bonds (A-1+, (Toronto Dominion LOC) (Cost $500,000) VMIG-1) 01/07/99 3.950 500,000 ------------ IOWA (4.7%) 500,000 Iowa Finance Authority Solid Waste Disposal Revenue Bond (Cedar River Paper Co. Project) (Bank of Nova Scotia LOC) (Cost $500,000) (A-1+, P-1) 01/01/99 5.150 500,000 ------------ LOUISIANA (1.9%) 200,000 Louisiana Public Facilities Authority, Hospital Revenue, Willis-Knighton Medical Center (AMBAC Insured) (final maturity (A-1+, 9/1/27) (Cost $200,000) VMIG-1) 01/07/99 4.000 200,000 ------------ MARYLAND (4.7%) 500,000 Maryland Health and Higher Education Facility Authority Revenue Bond (Catholic (A-1+, Health Initiatives) (Cost $500,000) VMIG-1) 01/07/99 3.900 500,000 ------------ MICHIGAN (4.7%) 500,000 Delta County, Michigan Economic Development Corp. Environmental Revenue Bond VRDN+ (A-1+, (Cost $500,000) VMIG-1) 01/04/99 5.050 500,000 ------------ MISSISSIPPI (2.9%) 300,000 Jackson County, Mississippi, Port Facilities Revenue Refunding Bonds (Chevron Corp. USA Income Project) VRDN+ (Cost $300,000) (NR, P-1) 01/01/99 5.100 300,000 ------------ MISSOURI (4.7%) 500,000 Kansas City, Industrial Development Auth. Multifamily Housing Revenue Ref. Bonds (Sleepy Hollow Apts. Project) (Federal National Mortgage Assoc. LOC) (Cost $500,000) (A-1+, NR) 01/07/99 4.250 500,000 ------------
See Accompanying Notes to Financial Statements. 6 WARBURG PINCUS WORLDPERKS TAX FREE MONEY MARKET FUND STATEMENT OF NET ASSETS (CONT'D) December 31, 1998 - --------------------------------------------------------------------------------
RATINGS= PAR (MOODY'S/S&P) MATURITY RATE% VALUE --- ------------- -------- ----- ----- NEVADA (4.7%) $ 500,000 Clark County Airport Improvement Revenue Series 1993A (National Westminster LOC) (A-1+, VRDN+ (Cost $500,000) VMIG-1) 01/07/99 3.850 $ 500,000 ------------ NEW MEXICO (1.0%) 100,000 City of Farmington Pollution Control Revenue Refunding Bonds Series 1994A (Arizona Public Service Company) (Cost (A-1+, $100,000) VMIG-1) 01/01/99 5.100 100,000 ------------ NEW YORK (3.8%) 200,000 Long Island Power Authority Electric System Subordinated Revenue Bond (A-1+, (ABM-AMRO Bank N.V. LOC) VMIG-1) 01/01/99 5.100 200,000 200,000 New York City General Obligation 1994 Series B (Morgan Guaranty Trust LOC) (A-1+, VRDN+ VMIG-1) 01/01/99 5.000 200,000 ------------ TOTAL NEW YORK (Cost $400,000) 400,000 ------------ NORTH CAROLINA (22.7%) 500,000 Charlotte Airport Refunding Revenue Bond (A-1+, Series 1997A (MBIA Insurance LOC) VRDN+ VMIG-1) 01/07/99 3.950 500,000 500,000 Mecklenburg County General Obligation (A-1+, Series 1996B VRDN+ VMIG-1) 01/07/99 3.950 500,000 500,000 North Carolina Medical Care Commission Series 1995 (Moses H. Cone Memorial Hospital Project) (Wachovia Bank LOC) VRDN+ (A-1+, NR) 01/07/99 4.000 500,000 400,000 Raleigh-Durham Airport Authority Special Facility Refunding Revenue Bond (American Airlines, Inc. Project) (Royal Bank of Canada LOC) (A-1+, NR) 01/01/99 5.100 400,000 500,000 University of North Carolina Revenue Bond Series 1997C (Chapel Parking System Board of Governors of the UNC Project) (A-1+, (NationsBank LOC) VRDN+ VMIG-1) 01/07/99 3.950 500,000 ------------ TOTAL NORTH CAROLINA (Cost $2,400,000) 2,400,000 ------------ OHIO (1.0%) 100,000 Ohio Water Development Authority Pollution Control Revenue Bond Series 1997B (Cleveland Electric Co. Project) (FNB Chicago LOC) VRDN+ (Cost $100,000) (A-1+, P-1) 01/07/99 4.100 100,000 ------------ PENNSYLVANIA (4.7%) 500,000 Philadelphia, Pennsylvania Water & Waste (A-1+, Revenue Bond Series 1997B (Cost $500,000) VMIG-1) 01/07/99 3.850 500,000 ------------
See Accompanying Notes to Financial Statements. 7 WARBURG PINCUS WORLDPERKS TAX FREE MONEY MARKET FUND STATEMENT OF NET ASSETS (CONT'D) December 31, 1998 - --------------------------------------------------------------------------------
RATINGS= PAR (MOODY'S/S&P) MATURITY RATE% VALUE --- ------------- -------- ----- ----- TEXAS (4.7%) $ 500,000 Harris County Industrial Development Corp. (Shell Oil Co. Project) VRDN+ (Cost (A-1+, $500,000) VMIG-1) 01/01/99 4.900 $ 500,000 ------------ VIRGINIA (4.7%) 500,000 Alexandria IDA RB (Super & Curr Project) Series 1997 (First Union National Bank of North Carolina LOC) VRDN+ (Cost $500,000) (A-1, NR) 01/07/99 4.000 500,000 ------------ WYOMING (12.3%) 500,000 Lincoln County Pollution Control Bonds (Exxon Project) (A-1+, P-1) 01/01/99 5.050 500,000 300,000 Sublette County, Wyoming, Pollution Control Revenue Bond (Exxon Corp. Project) VRDN+ (A-1+, NR) 01/01/99 5.050 300,000 500,000 Unita County Pollution Control Revenue Bond Series 1993 (Chevron) VRDN+ (NR, P-1) 01/01/99 5.100 500,000 ------------ TOTAL WYOMING (Cost $1,300,000) 1,300,000 ------------ TOTAL INVESTMENTS AT VALUE (99.2%) (Cost $10,500,000*) 10,500,000 OTHER ASSETS IN EXCESS OF LIABILITIES (0.8%) 88,560 ----------- NET ASSETS (100.0%) (applicable to 10,588,560 shares) $10,588,560 =========== NET ASSET VALUE, offering and redemption price per share ($10,588,560 divided by 10,588,560) $ 1.00 ===========
INVESTMENT ABBREVIATIONS IDA = Industrial Development Agency LOC = Letter of Credit NR = Not Rated VRDN = Variable Rate Demand Notes - -------------------------------------------------------------------------------- = Credit ratings given by Moody's Investors Service, Inc. and Standard & Poor's Ratings Services are unaudited. + The interest rate shown is the rate as of December 31, 1998 and the maturity date shown is the longer of the next interest readjustment date or the date the principal amount owed can be recovered through demand. * Also cost for federal income tax purposes. See Accompanying Notes to Financial Statements. 8 WARBURG PINCUS WORLDPERKS TAX FREE MONEY MARKET FUND MATURITY SCHEDULE OF PORTFOLIO December 31, 1998 (Unaudited) - -------------------------------------------------------------------------------- MATURITY SCHEDULE (DAYS) PAR PERCENTAGE OF PORTFOLIO ----------------- ----------- ------------------------ (CUMULATIVE) 1-7 $10,500,000 100.0% 100.0% 8-14 0 0.0 100.0 15-30 0 0.0 100.0 31-60 0 0.0 100.0 61-90 0 0.0 100.0 91-120 0 0.0 100.0 121-150 0 0.0 100.0 Over 150 0 0.0 100.0 ----------- ----- $10,500,000 100.0% =========== ===== Average Weighted Maturity -- 4.46 days See Accompanying Notes to Financial Statements. 9 WARBURG PINCUS WORLDPERKS MONEY MARKET AND TAX FREE MONEY MARKET FUNDS STATEMENTS OF OPERATIONS - --------------------------------------------------------------------------------
WORLD PERKS WORLDPERKS TAX FREE MONEY MARKET FUND* MONEY MARKET FUND* ------------------ ------------------- INVESTMENT INCOME $152,539 $ 88,703 -------- -------- EXPENSES: Investment advisory 11,885 11,091 Administrative Services 6,126 5,730 Distribution Fees 7,419 6,932 Registration 6,000 6,000 Audit 5,000 5,000 Blue sky 5,000 5,000 Legal 5,000 5,000 Custodian 3,000 3,000 Transfer agent 1,561 1,556 Directors 1,250 1,250 Printing 1,010 1,000 Miscellaneous 1,000 1,000 -------- -------- 54,251 52,559 Less: fees waived, expenses reimbursed and transfer agent fee offsets (36,890) (36,286) -------- -------- Total Expenses 17,361 16,273 -------- -------- Net Investment Income 135,178 72,430 -------- -------- NET REALIZED AND UNREALIZED GAIN FROM INVESTMENTS: Net realized gain from security transaction 112 0 -------- -------- Net increase in net assets resulting from operations $135,290 $ 72,430 ======== ========
* For the period October 1, 1998 (Commencement of Operations) through December 31, 1998. See Accompanying Notes to Financial Statements. 10 WARBURG PINCUS WORLDPERKS MONEY MARKET AND WORLDPERKS TAX FREE MONEY MARKET FUNDS STATEMENTS OF CHANGES IN NET ASSETS - --------------------------------------------------------------------------------
WORLDPERKS WORLDPERKS TAX FREE MONEY MARKET MONEY MARKET FUND* FUND* ----------------- ------------------- FROM OPERATIONS: Net investment income $ 135,178 $ 72,430 Net realized gain from security transactions 112 0 ----------- ----------- Net increase in net assets resulting from operations 135,290 72,430 ----------- ----------- FROM DISTRIBUTIONS: Dividends from net investment income (135,178) (72,430) ----------- ----------- FROM CAPITAL SHARE TRANSACTIONS (AT $1 PER SHARE): Proceeds from sale of shares 19,852,748 13,444,874 Reinvested dividends 121,553 62,708 Net asset value of shares redeemed (7,148,907) (3,019,022) ----------- ----------- Net increase in net assets from capital share transactions 12,825,394 10,488,560 ----------- ----------- Net increase in net assets 13,825,506 10,488,560 NET ASSETS: Beginning of period 100,000 100,000 ----------- ----------- End of period $12,925,506 $10,588,560 =========== ===========
* For the period October 1, 1998 (Commencement of Operations) through December 31, 1998. See Accompanying Notes to Financial Statements. 11 WARBURG PINCUS WORLDPERKS MONEY MARKET FUND FINANCIAL HIGHLIGHTS (For a Share of the Fund Outstanding Throughout Each Period) - -------------------------------------------------------------------------------- 1998(1) PERIOD ENDED: ------- PER-SHARE DATA: Net asset value, beginning of period $ 1.00 ------- INVESTMENT ACTIVITIES: Net investment income .0115 ------- DISTRIBUTIONS: From net investment income (.0115) ------- NET ASSET VALUE, END OF PERIOD $ 1.00 ======= Total return 1.15%(2) RATIOS AND SUPPLEMENTAL DATA: Net assets, end of period (000s omitted) $12,926 Ratios of expenses to average net assets .58%3,4 Ratio of net income to average net assets 5.13%(4) Decrease reflected in above operating expense ratio due to waivers/reimbursements 1.24%(4) - -------------------------------------------------------------------------------- (1) For the period October 1, 1998 (Commencement of Operations) through December 31, 1998. (2) Non annualized. (3) Interest earned on uninvested cash balances is used to offset portions of the transfer agent expense. These arrangements had no effect on the fund's expense ratio. (4) Annualized. See Accompanying Notes to Financial Statements. 12 WARBURG PINCUS WORLDPERKS TAX FREE MONEY MARKET FUND FINANCIAL HIGHLIGHTS (For a Share of the Fund Outstanding Throughout Each Period) - -------------------------------------------------------------------------------- 1998(1) PERIOD ENDED: ------- PER-SHARE DATA Net asset value, beginning of period $ 1.00 ------- INVESTMENT ACTIVITIES: Net investment income .0066 ------- DISTRIBUTIONS: From net investment income (.0066) ------- NET ASSET VALUE, END OF PERIOD $ 1.00 ======= Total return .66%(2) RATIOS AND SUPPLEMENTAL DATA: Net assets, end of period (000s omitted) $10,589 Ratios of expenses to average net assets .58%3,4 Ratio of net income to average net assets 2.91%(4) Decrease reflected in above operating expense ratios due to waivers/reimbursements 1.31%(4) - -------------------------------------------------------------------------------- (1) For the period October 1, 1998 (Commencement of Operations) through December 31, 1998. (2) Non annualized. (3) Interest earned on uninvested cash balances is used to offset portions of the transfer agent expense. These arrangements had no effect on the fund's expense ratio. (4) Annualized. See Accompanying Notes to Financial Statements. 13 WARBURG PINCUS WORLDPERKS MONEY MARKET AND WORLDPERKS TAX FREE MONEY MARKET FUNDS NOTES TO FINANCIAL STATEMENTS December 31, 1998 - -------------------------------------------------------------------------------- 1. SIGNIFICANT ACCOUNTING POLICIES The Warburg Pincus WorldPerks Money Market Fund (the "WorldPerks Money Market Fund") and the Warburg Pincus WorldPerks Tax Free Money Market Fund (the "WorldPerks Tax Free Money Market Fund") are registered under the Investment Company Act of 1940, as amended (the "1940 Act"), as diversified, open-end management investment companies. Investment objectives for each fund are as follows: the WorldPerks Money Market Fund is designed to provide investors with high current income consistent with liquidity and stability of principal; the WorldPerks Tax Free Money Market Fund is designed to provide investors with as high a level of current income that is exempt from federal personal income taxes as is consistent with preservation of capital and liquidity. The net asset value of each fund is determined as of noon and the close of regular trading on the New York Stock Exchange. Each fund's investments are valued under the amortized cost method, which approximates market value. Amortized cost involves valuing a portfolio instrument at its cost initially and thereafter assuming a constant amortization to maturity of any discount or premium, regardless of the impact of fluctuating interest rates on the market value of the instrument. Security transactions are accounted for on a trade date basis. Interest income is recorded on the accrual basis. The cost of investments sold is determined by use of the specific identification method for both financial reporting and income tax purposes. Dividends from net investment income are declared daily and paid monthly. Distributions of net capital gains, if any, are declared and paid annually, although the WorldPerks Money Market Fund may declare and pay short-term capital gains, if any, periodically as the Board of Directors determines. To the extent that a net realized capital gain can be reduced by a capital loss carryover, such gain will not be distributed. Income and capital gain distributions are determined in accordance with federal income tax regulations which may differ from generally accepted accounting principles. No provision is made for federal taxes as it is each fund's intention to continue to qualify for and elect the tax treatment applicable to regulated investment companies under the Internal Revenue Code of 1986, as amended, and make the requisite distributions to its shareholders which will be sufficient to relieve it from federal income and excise taxes. 14 WARBURG PINCUS WORLDPERKS MONEY MARKET AND WORLDPERKS TAX FREE MONEY MARKET FUNDS NOTES TO FINANCIAL STATEMENTS (CONT'D) December 31, 1998 - -------------------------------------------------------------------------------- 1. SIGNIFICANT ACCOUNTING POLICIES -- (CONT'D) Each fund may enter into repurchase agreement transactions. Under the terms of a typical repurchase agreement, a fund acquires an underlying security subject to an obligation of the seller to repurchase. The collateral is in the fund's possession through its custodian. Each agreement requires that the market value of the collateral be sufficient to cover payments of interest and principal; however, in the event of default or bankruptcy by the counterparty to the agreement, retention of the collateral may be subject to legal proceedings. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amount of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. The funds have an arrangement with their transfer agent whereby interest earned on uninvested cash balances was used to offset a portion of their transfer agent expense. For the period ended December 31, 1998, each fund received credits or reimbursements under this arrangement as follows: FOR THREE MONTHS ENDED FUND DECEMBER 31, 1998 - ---- ----------------- WorldPerks Money Market $61 WorldPerks Tax Free Money Market 56 2. INVESTMENT ADVISER AND SUB-ADVISER, CO-ADMINISTRATORS AND DISTRIBUTOR Warburg Pincus Asset Management, Inc. ("Warburg"), which is indirectly controlled by Warburg, Pincus & Co., serves as each fund's investment adviser. For its investment advisory services, Warburg receives a fee calculated at an annual rate of .40% of each fund's average daily net assets. For the period ended December 31, 1998, investment advisory fees and voluntary waivers were as follows:
GROSS NET EXPENSE FUND ADVISORY FEE WAIVER ADVISORY FEE REIMBURSEMENT - ---- ------------ -------- ------------ ------------- WorldPerks Money Market $11,885 $(11,885) $ 0 $(19,002) WorldPerks Tax Free Money Market 11,091 (11,091) 0 (19,593)
BlackRock Institutional Management Corporation ("BIMC"), formerly PNC Institutional Management Corporation, a wholly owned subsidiary of PNC 15 WARBURG PINCUS WORLDPERKS MONEY MARKET AND WORLDPERKS TAX FREE MONEY MARKET FUNDS NOTES TO FINANCIAL STATEMENTS (CONT'D) December 31, 1998 - -------------------------------------------------------------------------------- 2. INVESTMENT ADVISER AND SUB-ADVISER, CO-ADMINISTRATORS AND DISTRIBUTOR -- (CONT'D) Bank, N.A., serves as each fund's sub-investment adviser. From its investment advisory fee, Warburg pays BIMC a fee. No compensation is paid by the WorldPerks Funds to BIMC for its sub-investment advisory service. Credit Suisse Asset Management Limited ("CSAM"), a wholly owned subsidiary of Credit Suisse Group, and PFPC Inc. ("PFPC"), an indirect, wholly-owned subsidiary of PNC Bank Corp. serve as each fund's co-administrator. For its administrative services, CSAM currently receives a fee calculated at an annual rate of .10% of each fund's average daily net assets. For the period ended December 31, 1998, administrative services fees earned and voluntarily waived by CSAM were as follows:
CO-ADMINISTRATION NET FUND FEE WAIVER ADMINISTRATION FEE - ---- ----------------- -------- ------------------ WorldPerks Money Market $ 2,971 $ (2,971) $ 0 WorldPerks Tax Free Money Market 2,773 (2,773) 0
For administrative services, PFPC currently receives a fee calculated at an annual rate of .10% on each fund's first $500 million in average daily net assets, .075% on the next $1 billion in average daily net assets, and .05% of average daily net assets in excess of $1.5 billion. For the year ended December 31, 1998, administrative service fees earned and voluntarily waived by PFPC (including out-of-pocket expenses) were as follows:
CO-ADMINISTRATION NET FUND FEE WAIVER CO-ADMINISTRATION FEE - ---- ----------------- ------- --------------------- WorldPerks Money Market $3,155 $(2,971) $184 WorldPerks Tax Free Money Market 2,957 (2,773) 184
Counsellors Securities Inc. ("CSI"), also a wholly owned subsidiary of Warburg, serves as each fund's distributor. For its distribution services, CSI receives a fee calculated at an annual rate of .25% of the average daily net assets of each fund. For the period ended December 31, 1998, shareholder servicing and distribution fees earned by CSI were as follows: FUND DISTRIBUTION FEE - ---- ---------------- WorldPerks Money Market $ 7,419 WorldPerks Tax Free Money Market 6,932 16 WARBURG PINCUS WORLDPERKS MONEY MARKET AND WORLDPERKS TAX FREE MONEY MARKET FUNDS NOTES TO FINANCIAL STATEMENTS (CONT'D) December 31, 1998 - -------------------------------------------------------------------------------- 3. CAPITAL SHARE TRANSACTIONS Transactions in shares of each fund were as follows:
WORLDPERKS WORLDPERKS TAX FREE MONEY MARKET MONEY MARKET -------------- -------------- FOR THE PERIOD OCTOBER 1, 1998 (COMMENCEMENT OF OPERATIONS) THROUGH DECEMBER 31, 1998 ------------------------------- Shares sold 19,852,748 13,444,874 Shares issued to shareholders on reinvestment of dividends 121,553 62,708 Shares redeemed (7,148,907) (3,019,022) -------------- -------------- Net increase in shares 12,825,394 10,488,560 ============== ==============
4. LIABILITIES At December 31, 1998 the funds had the following liabilities:
WORLDPERKS WORLDPERKS TAX FREE MONEY MARKET MONEY MARKET FUND ------------ ------------------- Dividends Payable $ 2,491 $ 2,881
5. NET ASSETS At December 31, 1998, capital contributions and accumulated net realized loss from security transactions have been adjusted for permanent book/tax differences. Net Assets at December 31, 1998, consisted of the following:
WORLDPERKS WORLDPERKS TAX FREE MONEY MARKET MONEY MARKET ------------ ------------------- Capital contributed, net $12,925,394 $10,588,560 Accumulated net realized gain from security transactions 112 0 ----------- ----------- Net assets $12,925,506 $10,588,560 =========== ===========
17 WARBURG PINCUS WORLDPERKS FUNDS REPORT OF INDEPENDENT ACCOUNTANTS - -------------------------------------------------------------------------------- To the Board of Directors and Shareholders of WARBURG, PINCUS WORLDPERKS MONEY MARKET FUND, INC. AND WARBURG, PINCUS WORLDPERKS TAX FREE MONEY MARKET FUND, INC.: In our opinion, the accompanying statements of net assets and the related statements of operations and of changes in net assets and the financial highlights present fairly, in all material respects, the financial position of Warburg, Pincus WorldPerks Money Market Fund, Inc. and Warburg, Pincus WorldPerks Tax Free Money Market Fund, Inc. (the "Funds") at December 31, 1998, the results of their operations, and the changes in their net assets and their financial highlights for the period October 1, 1998 (commencement of operations) to December 31, 1998, in conformity with generally accepted accounting principles. These financial statements and financial highlights (hereafter referred to as "financial statements") are the responsibility of the Funds' management; our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits of these financial statements in accordance with generally accepted auditing standards, which require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. We believe that our audits, which included confirmation of securities at December 31, 1998 by correspondence with the custodian, provide a reasonable basis for the opinion expressed above. PricewaterhouseCoopers LLP 2400 Eleven Penn Center Philadelphia, Pennsylvania February 5, 1999 18 [LOGO] WARBURG PINCUS WORLDPERKS FUNDS P.O. BOX 9030, BOSTON, MA 02205-9030 800-WARBURG (800-927-2874) o www.warburg.com COUNSELLORS SECURITIES INC., DISTRIBUTOR FFNWF-2-1298 -----END PRIVACY-ENHANCED MESSAGE-----